Day: December 10, 2018

Ahmed, 15 years old, lives in the rural farming community of Assuit in Abnoub, Egypt. His family consists of his father, mother and two siblings, Mahmoud and Sara. As with most of the local families living in Ahmed’s low-income community, his father pressured him to drop out of school to help support their family’s basic needs. Without another resource to support their livelihood, their family wouldn’t be able to afford food or clothing.

“My father asked me to quit school. Obeying his wish, I started working, as he does, as a local worker, leaving all of my dreams behind,” Ahmed remembered. His father made a small income by knocking down walls or parts of houses prior to construction projects.

Many children in Assuit feel this threat to continuing their education, and suspend their ambitions.

Through a Save the Children volunteer working in his community, I heard about Ahmed’s situation. I visited Ahmed’s house and urged his father to let his son continue his education. I explained that through our program, Ahmed could learn how to obtain a small loan and how to start his own business project. He could participate over the summer, learn how to earn money and still return to school at the start of the next academic year. Though he refused at the beginning, I was able to convince Ahmed’s father to enroll him in our adolescent development program.

Ahmed with his brother Mohamed and cousin Mahmoud proudly sitting on their very own plot of land.

Our work aims to build teens’ life skills, by providing career counseling and livelihood activities so they can explore labor and local market needs and be prepared to make informed career choices. They also learn how to develop projects using local resources. Through these activities, adolescents are given the chance to play an active role in their society. Without them, they would have had no career options except to follow in the footsteps of their parents, finding work in low-paying local labor.

“I still remember how helpless I was before Mr. Helmy’s visit. All I knew was that I would end up with a chisel and a hammer just like my father,” said Ahmed.

Ahmed started participating in our Tomohaty program, meaning “Ambitions” in Arabic, in May of 2017. He learned how to start, manage and finance his own start-up business. He even motivated his brother and cousin, Mahmoud, to join, who was also in a similar situation with his own hardworking father, hungry family and personal desire to finish his education.

Together through the program they were able to receive a loan to rent a small plot of land. The boys started cultivating a farm with mulukhiyah, a vegetable plant common in Middle Eastern countries and a main component of traditional dishes in the area. The farming skills they already had learned from their grandfather, so now with the loan and the skills learned on how to manage their expenses and goals, they were ready to try something new.

By the end of the summer, they were able to successfully grow three harvests of the crop to sell, covering all of their expenses and helping their families.

Ahmed learned how to manage a business project through sponsorship.

“I am now self-confident. I feel like I’m able to reshape my future. I feel powerful.” said Ahmed proudly.

With the extra money made over the summer, Ahmed was able to return to school. Today, his next big dream is to finish high school.

Without sponsors, many children would remain as Ahmed was before sponsorship, deprived of any ambition, dreams, hopes or goals. “One of the reasons I feel proud of being part of Save the Children is our ability to create new opportunities for children.” said Ahmed, with a worldly understanding beyond his years.

Written by Andrew Wainer, Director, Policy Research at Save the Children

The Addis Tax Initiative (ATI) was launched in 2015 in Ethiopia with developing nations as key signatories, but – like other global agreements – it faces challenges translating global dialogue in Berlin, New York and Paris to better tax policy in Nairobi, Monrovia and Tbilisi.

This challenge to operationalize the ATI is daunting, but national-level tax policy and administration is only part of the solution for transforming tax into an engine for financing well-being in developing countries.

Services including health and education are delivered to citizens at the local level and tax and spending at the sub-national level is where most citizens are impacted by fiscal policy that is either fair or regressive.

To ground its commitment of increased, transparent, and accountable DRM, the ATI is monitoring how developing country governments are increasing domestic revenue for inclusive development. But, so far, analysis of sub-national level domestic resource mobilization (DRM) is largely absent from this analysis.

The role of sub-national tax authorities is certainly difficult to track, but, to be relevant to the citizens’ ground truth, the should ATI integrate local tax policy and administration.

Bungoma County, Kenya

Even at the national level in Kenya, and other signatory counties, the ATI requires further understanding and integration – it’s not yet well-understood by many fiscal policymakers and implementers. There is a need for increased ownership at the national level.

But Save the Children, working with civil society, small business groups, and county assemblies on DRM in Bungoma County, Kenya, has found that citizens are best able to educate and influence policymakers – using the Addis Tax Initiative banner – at the local level.

Revenue generation capacity at the county level in Kenya remains low, with some reports that it is actually decreasing, even after the country’s 2010 devolution law. But in Bungoma County, motivated citizen groups are filling the gap, helping shape tax policy where local government capacity is low.

Civil society can be helpful intermediaries on local level DRM to both increase tax compliance and contribute to tax policy accountability, transparency, and inclusiveness.

Specifically, Save the Children is working with the Bungoma County Child Rights Network (BCCRN), small and micro-entrepreneurs (including women-owned businesses) and the local country assembly to improve local tax collection, making it more transparent, accountable, and pro-poor. It’s already paying dividends in increased tax compliance.

In Bungoma, the main sources of local revenue include business permits and market fees. The BCCRN started with these existing tax laws, working to increase revenue activities through analysis, advocacy, and stakeholder education, including on the Addis Tax Initiative.

The result is lower market fees, creating rates that are less onerous for small-business owners with slim profit margins, and, at the same time, expanding tax compliance among these groups as taxes are reduced to rates they are better able to pay. Because taxpayers are involved in the policy discussions they are also more bought-in to the policies and apt to comply with tax regulations they played a part in shaping.

This was accompanied with increasing rates on local supermarkets, who enjoyed large profit margins and were undertaxed, according to local citizen analysis. These civil society proposals were taken up by the local county assembly.

The ATI and Progress on DRM in Kenya

Civil society in Bungoma County is just getting started with tax policy advocacy, but Kenya, at all levels, is showing signs of progress. Further training could help civil society to partner with local government to enhance property taxes – another source of local revenue that is badly underutilized in Kenya.

And while civil society can support local tax authorities “from below” there is also a need for assistance from and alignment with national tax bodies “from above” such as the Kenya Revenue Authority. County level tax officials need national guidance on revenue generation strategies and medium- and long-term tax policy plans.

To maintain progress, the Kenya government and other ATI stakeholders should make advancements in two areas:

Support local civil society. Civil society groups are crucial intermediaries between local government and citizens. Trusted local organizations can build trust and participation between local tax collection authorities and tax payers, improving tax compliance, fairness, and accountability.

Support for sub-national DRM. Most citizens encounter the impacts of taxing and spending at the local level. Increasing domestic revenues at this level can enhance budgets for local public service delivery. ATI should include sub-national domestic resource mobilization into its mandate, analysis and goals.

Civil society is already making a difference for tax policy and administration. The ATI would be wise to tap into this local source of change to ensure that its global discussions make a difference at the community level.